Posted
by
timothy
on Tuesday March 20, 2012 @10:43AM
from the all-pancakes-and-lingonberries dept.

cold fjord writes "Sweden is rapidly moving towards a cashless economy. How will Sweden, and other countries in the future, balance efficiency, privacy, government control, and civil liberties? Or will they do all that technology allows? 'Bills and coins represent only 3 percent of Sweden's economy, compared to an average of 9 percent in the eurozone and 7 percent in the U.S. ... The Swedish Bankers' Association says the shrinkage of the cash economy is already making an impact in crime statistics. The number of bank robberies in Sweden plunged from 110 in 2008 to 16 in 2011 — the lowest level since it started keeping records 30 years ago. It says robberies of security transports are also down. The prevalence of electronic transactions — and the digital trail they generate — also helps explain why Sweden has less of a problem with graft than countries with a stronger cash culture, such as Italy or Greece, says economics professor Friedrich Schneider of the Johannes Kepler University in Austria. The flip side is the risk of cybercrimes. According to the Swedish National Council for Crime Prevention the number of computerized fraud cases, including skimming, surged to nearly 20,000 in 2011 from 3,304 in 2000.'"

Here in glorious America, we will naturally let Visa track every last penny spent, because the private sector is superior, and they will simply sell that data to law enforcement, among other interested stakeholders, as part of their process of 'monetizing consumer metrics'. Free as in 'Free Market'!

Here in glorious America, we will naturally let Visa track every last penny spent, because the private sector is superior, and they will simply sell that data to law enforcement, among other interested stakeholders, as part of their process of 'monetizing consumer metrics'. Free as in 'Free Market'!

It's not like everyone's oblivious to the fact that when you use Visa your purchases can be tracked. I'm aware of it every single time. But right now I have a choice to use cash if I want some discretion.

For me, the convenience of being able to track my own spending far outweighs my ability to care if the government can subpoena where I buy my morning coffee from. I understand (and agree with) your concern, but using payment cards offers a huge number of incentives that cash does not and can not.

And FYI, plenty of criminal transactions occur in the plastic world - and the red tape imposed by the government in trying to prevent that makes my job a lot more painful (and risky) than it needs to be. Criminals are always going to ruin things for everyone else; doubly so when it comes to getting paid. Sorry, that's just reality. Blame stupid law enforcement (see also: war on photography)

VISA doesn't track every penny spent. I write credit card billing software. VISA, MC, et al just get a transaction total. Only the vendor knows what was charged. VISA can look at the vendor and make assumptions, however they don't know if I bought a lot of candy bars or gas or what mixture of transactions from a Mobil station.

VISA does not know how many candy bars you bought, retail corporate does. Even back in the very early 90s I know for a fact they did, as I was getting interested in IT and our food store did complete transaction uploads nightly. Its not as much data as you'd think, even at 2400 baud. We had to upload distinct sales data anyway, think about it, otherwise how would automated push-ordering work? There were cube dwellers at corporate who's entire lives revolved around how many hamburger buns were sold the saturday of labor day or whatever.

So you are correct that VISA does not sell transaction detail records, but that doesn't mean they're not sold, it means the detail record comes from the retailer. At least it did 20 years ago.

Yes. 20 years ago is only 1992, not like the 60s or something. In 1990, 91, something like that our mid size grocery store in a mid size suburb of a mid size city got roughly 386 class machine (was it a 486?) in the managers office and it ran the dbms that read the upc from the scanner and told the register what to charge and its tax status. Also it kept a list of all loyalty cards who owed us money for bounced checks (at one point my job was keeping that list updated). We uploaded nightly at 1030 and woe to the assistant manager who couldn't "close out" before the upload began. Also we downloaded lists of bounced checks/loyalty cards from OTHER stores..

We made a big freaking deal about giving you coupons that reflected your previous purchases. Maybe, like 99% of the population, you just threw that out, but that doesn't mean we didn't print the coupons at the bottom of the register tape. You had a "check cashing/loyalty card", right? To at least some extent your coupons mailed to your door reflected your purchases... the presence or lack of baby formula and dog food tended to reflect your previous purchases... We didn't do individualized personalized coupon mailings, but we did classify them.

Now I donno if they stored all the data, or how long. Now a days you'd assume they keep it all forever. Back then I would assume they wiped whatever they thought appropriate when they needed space. At that time (err, 93 or so) I was using a 40 meg drive and a 386/40 with 5 megs ram to run SLS linux.. Can't store everything forever with that tech.

Didn't you notice that if you bought something with a CC and returned it with a receipt, we credited your card without asking to see it again? We had all that stored.

I suppose it depends on location, blah blah blah, but I was at a unnoteworthy little grocery store most nights while going to tech school in the day.

When I worked for Kroger Food stores in the 90's, we uploaded that data every single night. We had to take any online register off, close their drawers out and then begin the process of batch totaling and upload of the days sales figures as well as a transaction by transaction record. We could pull up any transaction for the day from the register or from prior dates via logging into the central database.

VISA sure as heck does know. How do you think you get double points for gas, or hotel stays, or whatever? Depending on the card, up to the first 19 items you purchase get sent back to VISA. So if you don't want a record that you bought something, make it your 20th item (and don't buy 20 oranges, I wrote the software smart enough to group the same items). They do only know generic things (you purchased a food item, not that your purchased a specific candy bar), but the generic list is broken down into things like alcohol, tobacco, so they do have information you might not want them to know like that last Friday you bought a six pack and some smokes from the corner gas station.

I once had a business trip to Germany and bought a cuckoo clock there with my credit card to have shipped home. When I got back to the US there was a voicemail at home from my credit union regarding a suspicious transaction in Germany and they were putting it on hold. I confirmed the transaction and they released it. Apparently this was caught by their theft detection system.

Credit card companies CAN collect what you purchased and where. If your card is stolen, they can track purchase patterns against

About a year after Pole created his pregnancy-prediction model, a man walked into a Target outside Minneapolis and demanded to see the manager. He was clutching coupons that had been sent to his daughter, and he was angry, according to an employee who participated in the conversation.

“My daughter got this in the mail!” he said. “She’s still in high school, and you’re sending her coupons for baby clothes and cribs? Are you trying to encourage her to get pregnant?”

The manager didn’t have any idea what the man was talking about. He looked at the mailer. Sure enough, it was addressed to the man’s daughter and contained advertisements for maternity clothing, nursery furniture and pictures of smiling infants. The manager apologized and then called a few days later to apologize again.

On the phone, though, the father was somewhat abashed. “I had a talk with my daughter,” he said. “It turns out there’s been some activities in my house I haven’t been completely aware of. She’s due in August. I owe you an apology.”

Some also do mobile phone tracking which means they look where you walk through the store, some even have software which figures out the ID of the phone. So they can combine that data with that of previous visits. Maybe they can even combine that with what you bought.

I haven't looked at NFC to see to see if that would make it easier to do that.

What? Bitcoin is not completely anonymous (and neither is cash for that matter). But its not far off cash either if you manage your wallet properly. Of course nodes can see IP numbers, but are not logged typically. Of course they could be, but again it is quite possible to send transactions via tor for example.

However every transaction is public and without some proper wallet management you would not be so anonymous.

Of course it's more efficient to have corporations track and control you directly. Government is a middle man used to give these practices a veneer of legitimacy. That costs corporations money that could be better spent on executive bonuses, so it's best (for corporations) that the unwashed masses embrace their overlord status without the illusion of a government for the people.

As per the article: so do the greeks and italians (and outside the euro zone, indians, arabs, bangladeshi's, pakistani's etc).

Cash sounds like a wonderful privacy tool. It's so wonderful that you can use it to dodge tax. http://www.indianexpress.com/news/goa-education-minister-detained-with-10-mn/770712/ For example.

That's kind of the thrust of the article, cash based societies are more corrupt than electronic ones, because with electronic ones you can actually track where the money is going to and from.

From TFA:

"If people use more cards, they are less involved in shadow economy activities," says Schneider, an expert on underground economies.

In Italy — where cash has been a common means of avoiding value-added tax and hiding profits from the taxman — Prime Minister Mario Monti in December put forward measures to limit cash transactions to payments under euro1,000 ($1,300), down from euro2,500 before.

...Oscar Swartz, the founder of Sweden's first Internet provider, Banhof, says a digital economy also raises privacy issues because of the electronic trail of transactions. He supports the idea of phasing out cash, but says other anonymous payment methods need to be introduced instead.

"One should be able to send money and donate money to different organizations without being traced every time," he says."

So fair enough, you think your privacy is being invaded by using electronic payments. But the government thinks you're using cash to dodge legally required taxes. And if you're both right who wins? The only way this is going to play out is asking for privacy rules surrounding the record keeping on transactions, because it's not fair to anyone when people dodge taxes, and if there's a way to track that, governments will (as they should).

Why not just track us all, because it's not fair to anyone when people commit crimes? Once we lose an underlying presumption of innocence, any invasion of our privacy or erosion of personal liberties seems to make sense.It's not my job to help the government do theirs. They can catch tax cheats with good, old fashioned detective work. To presume that my heavy use of cash is somehow illegal or fraudulent is ridiculous.

You know, it might be a completely alien thought to some (most?) Americans but some countries have citizens / subjects that trust their government to represent and protect their interests.

Good for them. Really, if their government really does represent their interests, it is good for them. But that does not describe the United States government unless you are quite wealthy or a corporation.

You know, it might be a completely alien thought to some (most?) Americans but some countries have citizens / subjects that trust their government to represent and protect their interests.

I can assure you Sweden is not among them. People here are fairly sceptical to politicians, and one of the massive headaches for our government right now is that people don't like the data-retention laws that EU directives require member states to implement. Basically most people here pretty much just wants government to do its job and not fuck it up. The American crusade-like political rallying you have before every US elections would just not work in Sweden, since such candidates would be perceived as crazy and unelectable. The current right wing government likely got to power precisely because their leader, Fredrik Reinfeldt, has a fairly calm and down to earth image. That doesn't mean we don't have people screaming at the top of their lungs about immigration and whatnot. They just don't get enough votes to define policy.

I don't know about "usually." It's like anything, too little is bad, and too much is bad. N. Korea and Somalia both suck hard. So there's no general answer, you just have to look at each issue on its merits.

Well, there's the difference between mostly cashless and completely cashless. My salary is paid direct deposit, pretty much all my bills are paid electronically. I don't really care that the government knows I pay rent and insurance and electricity and broadband and groceries and that I purchase clothes and furniture and computer equipment and whatnot. But if I don't want the government to keep track of how much liquor I drink I can pay in cash at the liquor store. I can pay in cash when I'm out partying all night. Cash is for all those transactions which I don't think it's any of the damn government's business to know about.

Every so often people come up with the "now 9x% of all trade happens electronically, we should go cashless" but it's meaningless to measure it by volume. At work some 9x% I'm in the presence of coworkers, that doesn't mean I don't want privacy when I make a bathroom break. Same with all the shit people share on Facebook, even for those that share 9x% of their life there the rest matters. Yeah, it's annoying with the black market that doesn't pay taxes, but then put the effort into tracking those who make a living that way instead of taking everyone's privacy away. I don't know if I follow every detail of every paragraph in the tax code and I don't know if anyone could but it's 95%+ correct. And that damn well better be good enough.

Forget the tin foil hat government paranoia. The HUGE problem that most people overlook is that you're handing 3% of all retail sales to Visa/MC. The problem is that this is out of sight and out of mind for 99% of the population that doesn't have a merchant account, and that people don't think that every time they use a card, Visa/MC is getting 2-3%. That's an absurd amount of a country's GNP to pay into one organization for what boils down to a convenience.

I don't care what sort of up sides it has. The government being able to track every last penny spent is far too frightening to even consider.

Even worse -- or at least as bad -- is the $0.80 transaction fee for every such transaction. And the law that says that you cannot recover this fee from the customer. What the hell is a merchant supposed to in that situation? This is The Banks Make Billions Society now.

Monetary lesson: Our economy is based on goods and services. Money is only a medium for the exchange of those items. What you are suggesting is really going back to a barter system.

Second lesson: The "devaluation" that you speak of is called inflation. Yes, over time an individual dollar is worth less. We also make more of these dollars for our time. This is not some giant conspiracy.

Third lesson: Gold and land do not have a constant value. That is complete lunacy. Like every other good and service its value is relative to other goods and services

Fourth lesson: If you want to use gold as a curency, go for it. It doesn't change the underlying issue that it only stands in for the goods and/or services you wish to buy/sell.

How do you define naturally? Is natural due to natural course of advances in technology and civilization? I'm pretty positive oil is worth more now than it was when the dollar was first printed. If the supply of some good decreases due to dwindling resources a source of natural inflation or a new source located a source of deflation? If the amount of people in a population increases, universally creating more demand for every item, is this a natural source of inflation since every good is now able to be

They don't. Gold definitely undergoes supply changes (what do you think happens when a company finds and opens a new gold mine?), and even land undergoes supply changes: land is lost and gained from the sea, becomes unusable due to natural and man-made disasters, and has its use changed due to social and regulatory changes. And finally, the challenges you refer to in your parenthesis are the reason we aren't on the gold standard anymore.

I agree that an all-digital economy makes electronic robbery of various forms much easier and much more invisible. But that's where regulations and laws can help. The question is: are we willing to support the laws necessary to have a smoothly running digital economy, or are we going to throw our hands up, say "government is evil" , and have the worst of both worlds?

and even land undergoes supply changes: land is lost and gained from the sea, becomes unusable due to natural and man-made disasters, and has its use changed due to social and regulatory changes

Add to that: scarcity isn't just about supply, it's about the ability of supply to meet demand. With the global population doubling every n years, the ability of the supply of land to meet demand is obviously dropping because the amount of land per capita is dropping.

Just to clarify the parents last point what Nixon did was close the international gold window thus removing the last tie between the US Dollar and gold. At the time the ratio was fixed at $35 to an ounce of gold. Previous to this, during the depression, the value of the dollar was devalued as the exchange rate was $20.67 per ounce to gold to $35 per ounce of gold. Additionally the government nationalized the gold holdings of the federal reserve and issued them gold certificates. To further move from the go

This is true. However current economies are set up to always grow, and right now i don't think we can get another century of that. For example population sizes of a lot of countries is now stabilizing or even going slightly negative.

The supply of solar energy is fixed. The sun only puts out so much power. If you have a non zero population growth, you'll eventually reach a limit where you need more energy from the sun, than the sun gives out.

Of course the costs associated with getting the solar energy will also increase as population increases ( all the easy sunny spots will be taken,leaving spots like the rainforest, and england.) Then you've got your volcanic eruptions that will block the sun, causing the value of the stored solar to

Yes, obviously but that wasn't the question. The question was why? Are the things bought with the dollar intrinsically worth more now? No. So if the value of the object has not changed but it's price in dollars has, then what changed? The value of the dollar obviously. It is now worth less and has been devalued.

Things cost more over time in dollar terms. But guess what. Income goes up in dollar terms as well.

Yes, but not as fast which is why the middle-class is shrinking and merging with the lower-class.

Now go take some economic classes and stop getting your education from conspiracy theory websites.

I suggest you get some information from somewhere other than past bankers. Also, remember what you stu

They didn't cost more in the 1800s when the dollar held its value (pre-federal reserve). Inflation is not a given, and in fact there's no good reason for it to exist. The dollar and prices should hold constant.

BTW who is Ron Apul?

And where does it say in the Constitution that a private bank (the Fed) should be given an exclusive monopoly by the Congress? There's nothing that I can find. I see Congress has the power to create an army and a navy and

I've also heard USA banks are the last system to use checks, or paper checks anyway.So... what does a bank office do, if it doesn't handle paper checks or coins? Is it more of a sales office for loans and such?

"So... what does a bank office do"They charge you money to look after your money for you and handle the transfer of that money to others.In other words they charge you £10 a month for (I exaggerate here but) a very simple script someone wrote many years ago and a small amount of database space. In return they also get the inconvenience of having your money in their hands.

Cashless means dangerous should our electronic web collapse. As long as cash currency is accepted it's always best to keep something on hand. Woe be the day we loose our paper or coin currency completely.

real gold or fools gold? You're better off collecting some govt issued silver and gold coins. A known commodity.China issued a pretty cool set of 1/10 ounce animal coins last decade ("year of the rat" etc)Back when the dollar was worth more and you could buy a 1/10th oz for something like $40 this was not a huge investment, since the dollar has tanked the same amount of gold costs over $150 now which is getting a little ridiculous.I suppose it depends where you live, but safe deposit boxes are usually pret

None of that has anything to do with being a good or terrible currency.

A good currency is more or less constant quantity, hard to make more on demand. Doesn't tarnish or rot or otherwise disappear over time. Infinitely divisible (unlike, say, seashells or cows). High volumetric value density and high mass value density. Basically the opposite of beer.

No, actually, consistent quantity is a big problem for currency because it leads to deflation and you really don't want that, it can hamstring an economy badly.

Simple example:

Suppose you and 3 friends decide to create your own little currency of sorts. You have favour tokens. Each time you do a favour for someone, they pay you in a token, and likewise you pay them when you want them to do a favour for you. Makes sure everyone is contributing. So you each start with 2 tokens.

Things work well, your little economy burgeons as you all do favours for each other and the tokens move around quickly. Other people notice this and want in. So you let them, however new joiners don't get any tokens to start, they have to earn it. Soon you have 8 people. Now there's only one token per person total. So if someone does a favour, someone else is left with no tokens. The economy start to get hamstrung. You have cases where someone wants to do a favour for someone else, but can't because that person has no token and nobody needs a favour from them at the moment.

Then it grows larger, you get 12 people. Now at best there will be 4 people without tokens at all times, and there can be more. Your economy is stalling in a bad way. People have to wait around until the person who wants them to do a favour can do one for someone else and get a token so they can do their favour.

Now all this could be solved simply be expanding the amount of currency. If as the economy grew, more currency was added, this problem would be avoided. This might not only happen when new people join, but just when more is being done. You start doing so much for each other that 2 tokens per person just isn't enough, you need more to keep things flowing quickly.

Money is just something to facilitate trade, no more no less. It needs to do so well and for that, it does need to grow, at least until your economy stops growing.

Not only that, but what do you do if an emergency (severe weather, flooding, etc) knocks the power out and you need to buy supplies? I don't think debit or credit are very useful in that sort of situation.

Shocking I know, but stores can actually still process credit transactions when the phone lines are down. It isn't fun for anyone involved, and some small number of people actually freak out when you go to put their card the the "ka-chunker", but it isn't as if the older way of doing things are completely gone.

Cashless means dangerous should our electronic web collapse. As long as cash currency is accepted it's always best to keep something on hand. Woe be the day we loose our paper or coin currency completely.

I just plan on trading use of my body for goods and services should the electronic web collapse. Figure someone would be willing to provide monetary equivalence for an electrifying time with a balding mid-thirty-something.

I never carry it, just by debit cards. An additional benefit is that all your expenses are right there on paper via bank statements so you can evaluate your spending habits. I'd say that 95-99% of the time it's not a problem for my lifestyle, but I do have to hit up an ATM occasionally for the car wash. Now, when it sucks is when you don't realize you'll need cash (cover charge at a door), vending machine snacks, etc.

I can see it not working for younger people and their more dynamic, partying lifestyles but it works well at the micro level.

Myself, and most people I know just carry their debit card and ID around with them, along with $20 cash for incidentals. This works out ok even going to bars, because between two people, $40 will generally pay the cover for a small group of people, and you end up being paid in return with drinks. I'll keep $100 at the house for emergencies, but any place that requires more than $20 for a single transaction will take plastic these days.

Sorry, the above post don't make any sense. That prise is for internet trade. If you buy with your card in a shop using your pin then payment is free because the price(5 cent) is paid by the shop. Which is still cheeper for then shop then handling cash.

Here in Brasil, I've heard that the card companies take ~1% of each transaction. So it's common that stores won't accept anything but cash for cigarrettes (as their margin of profit is thin, so they say).

Also, uptime is a major problem. When I used to go out at saturday nights, systems were always "timing out".

But soon they will. In Germany, public transport, supermarkets, any shops and restaurants will accept a debit card under a uniform debt card system called EC (Electronic Cash).

The only thing one does need cash is for microtransactions - very small purchases from kiosks or coffee shops (Upto 5 Euro). Low adoption there seems to be primarily because the debt card-pin-receipt printing method is significantly slower than just dropping a euro coin for a beer. However, I believe as the speedier near-field technol

I was recently standing in line at a walgreens (its theoretically a pharmacy but most sale volume is convenience/beauty store items). Windy thunderstorm, power goes out.Manager walks thru line, if you have cash you stay in line and pay cashier who is using calculator and flashlight, if not, escorted to door.I had cash, bought my stuff.

Apparently a large enough fraction of the populace to be a "serious" problem, waits until their medication is gone, and that very hour the bottle is empty, they walk from the

I agree there are many advantages to a cashless society but one weakness has bothered me for a while. I've personally gone mostly cashless over the last few years and have several times been unable to give anything to a homeless person. At times in the past I've offered food or bought someone a hamburger but there's not always the time or access to nearby vendors, cash is the easiest way to give a little help.

Also just yesterday I met a kid selling candy bars for his school fundraiser and wasn't able to help out there. It's almost like you have to give them card readers these days.

Also just yesterday I met a kid selling candy bars for his school fundraiser and wasn't able to help out there. It's almost like you have to give them card readers these days.

My daughter's girl scout troop theoretically only accepts personal checks for their cookies... making it a waste of time to rob one of the girls. Also makes it kind of obvious if a buyer rips the girls off by giving the wrong (low) amount of money. In practice rather than practice, if you insist on handing her cash, I trade my daughter one of my personal checks in exchange for cash, which I guess makes me a money launderer.

My guess is, that kid asking for cash, probably has to give the cash to his dad in

FTS: " helps explain why Sweden has less of a problem with graft than countries with a stronger cash culture"

Sen. Dole takes out ~$10,000 in cash every couple of weeks, and admits is because he doesn't want anyone knowing how or where he spends is money. He even got investigated (briefly, politely) because of suspected money laundering due to his somewhat unusual volume of withdrawals.

I'm mixed on this. I would never want cash to go away; there are some things I just don't

There are ways to do electronic cash that is at least as anonymous as real cash. Note that its really hard to be truly anonymous. After all you have to give the cash to someone. Or take it out from somewhere.

No, it does not explain why they have less trouble with graft. Scandinavian countries had less trouble with graft than Italy or Greece before there was even a concept of a cashless economy. It is a cultural thing. It is even possible that the same cultural factors that led them to have less trouble with graft also contribute to them moving so easily towards a cashless economy.

"... The pronounced Swedish inclination to keep order bore strange fruit. A German refugee who stayed in Norway in the 1930s, fled to Sweden when Norway was occupied in 1940. He was arrested in Sweden and the encounter with the police there differed a lot from what he was used to from the Norwegian police. "What I supposed was meant to be a routine series of questions and answers, ended with my being arrested. My declarations did not seem to satisfy the officers. The examination was repeated during the foll

Whenever you hear of someone pushing to get rid of hard currency, they mention the decrease in crime... Yet the numbers here don't show me anything compelling. They show an 85.5% decrease in reported crimes relating to hard currency, and then gloss over a 505% increase in digital monetary crime. That's such a poor point to argue, why even mention it?

Here in Mexico the banks started to increase the number of debit cards, less people with cash means less robery, but an increase in "fast kidnappings". Basically they kidnap anyone randomly using any vehicle, being a taxi the most usual and in 3-4 hours visiting banks they empty you bank accounts.

Will still be using cash, even when forced to use a foreign currency or plain gold. Maybe the "official economy" will become cashless, but unless you can make a direct barter deal, some form of currency will still be used to exchange goods or services.